Investment Approach:Institutional InvestmentManagement & Consulting

Investment Approach:Institutional InvestmentManagement & Consulting

Institutional

Overview

Principles

Platform

Committee

Offerings

INSTITUTIONAL MANAGEMENT & CONSULTING

For endowments, foundations and other institutional clients, we are prepared to offer an outsourced CIO service. This service offering generally applies to institutional investors looking for customized investment consulting and management on a discretionary basis.

Our investment management and consulting services include the following:

OVERVIEW - INVESTMENTS

The investment landscape is complicated. Talking heads espouse their views frequently, often times contradicting each other or even themselves. These talking heads are often selling airtime or hyping up their own investment positions, so is it any wonder their views are often attention grabbing and even hyperbolic? This leaves clients wondering or developing views that may not always be helpful. At TC Wealth Partners and Trust Company of Illinois, we “Reed Between the Lines” to help make sense of the noise and create an individualized plan that works for you. We promise to have a view and be objective in the delivery of our advice.

We provide thought leadership in a variety of means. Please read our quarterly market commentaries and our investment blog “Reed Between the Lines.”

Behavioral Finance - Wealth and investment management is an art and a science.

Realizing that markets are a compilation of humans with a variety of conscious and unconscious biases is critical. Furthermore, psychology and behavioral finance shows us that individuals are also subject to emotional and physical stimulus that can hinder our cognitive abilities. This can and often does lead to poor decision making without a disciplined framework and the guidance of a seasoned investment advisor supported by a variety of checks and balances. This work is so profound that many people have won Nobel prizes in economics for work in this field called behavioral finance, including Daniel Kahneman, Richard Thaler and many others. The concepts and pitfalls are highly omnipresent in our ability to help set and manage clients’ expectations on the path to their definition of success.

CORE INVESTMENT PRINCIPLES

We believe that our core investment principles serve as a foundation for better understanding you, providing insights that matter to you, that then allows us to be more intentional together in the management of your wealth. These principles help us avoid the pitfalls of behavioral finance and create a customized plan that works for you.

Goals Based Investing

Whether you are an individual or an institution, your goals are your purpose for investing. Return expectations, risk tolerances, income needs and timelines are guide rails for determining your asset mix.

This process entails a deep discovery process of your needs, which then may lead to the benefits of running wealth forecasting scenarios that allow us to create probability based outcomes. (Wealth forecasting and probability based outcome exercises may vary by the level of financial planning involved).

Forward-Looking Expectations

Market behavior is driven by fundamentals, valuation levels and sentiment. These three pillars are impacted by a slew of factors including monetary and fiscal policies of nations. Thus, it is important to be forward-looking regarding cause and effect influences on market behavior.

Why is this so important? For example, the domestic fixed-income market has been on a 35-year bull market of declining interest rates. To simply assume historical returns will be the same going forward is simply erroneous and can create bad outcomes for those planning on and needing stability in the income they need from their assets. Instead, we believe it important to have a point of view on the causes and effects of various factors, so that we can create a more prudent picture of the future and how to invest accordingly.

Asset Allocation & Asset Location

Diversification is key. Like the pendulum on a clock, investors sway between being overly optimistic and pessimistic around long-term averages. Be cognizant of extremes in combination with cause and effect factors.

We believe that asset allocation is a critically important decision in constructing an investment portfolio. As such, we provide a variety of asset allocation recommendations that are based on varying levels of risk and return expectations (i.e., investment objectives). The asset classes that we include are thoughtfully selected based on the contributions that they can provide to a broadly diversified portfolio over short- and long-term perspectives. The combination of these return expectations at the asset class level with historical risk and correlations considerations allow us to build better financial planning and asset allocation modeling services. We believe that these forward-looking perspectives allow us to provide differentiated investment advice compared to others that may only consider historical return perspectives.

Portfolio Construction

This may be the most overlooked facet of overall portfolio management. It can help create desired outcomes with a higher degree of probability. Some markets are more efficient than others. Depending on your goals, be willing to pay for active management, certainly in less efficient asset classes. While indexing may provide for cheaper expenses, you will get the same level of return, risk and income as the index. Your goals may dictate more or less of each.

So, should I just index everything? The answer misses the point of the question. Determining whether you should include active or passive management strategies is an active decision and should be based on your needs, preferences, asset classes needed to help you fulfill your goals, and so many other things. We recommend that you simply walk away from anyone that dogmatically preaches one approach or another.

Disciplined Buy & Sell Framework

The investment world is littered with pitfalls, most of which are based in mental heuristics attributed to the field of behavioral finance. A focused effort on understanding elements of cause and effect help us create better outcomes by educating on and avoiding various pitfalls. This is also supported by our comprehensive due diligence effort that entails vetting new managers and strategies, while systematically reviewing and monitoring existing holdings to ensure the reasons those investments were originally chosen is sustainable going forward.

INVESTMENT PLATFORM – FROM IDEAS THROUGH IMPLEMENTATION

The foundation of our investment platform is grounded in providing institutional caliber global investment guidance with choice and flexibility for our advisors so that they can offer client-centered solutions. Ideas start based on our deep experiences and our network of investment partners. These ideas have a variety of checks and balances, including internal and external thought leadership from seasoned experts and a focus on not just returns but risk management. Our investment committee, sets our investment policy with forward-looking asset allocation and portfolio construction strategies implemented by a select roster of proven investment strategies.

We provide a variety of “guided portfolios” that entail different asset allocation mixes based on various risk/return parameters. These guided portfolios include recommendations for;

Socially Responsible (ESG) – Recommendations for clients with heightened sensitivity to environmental, social and governance issues.

TC Wealth Partner and Trust Company of Illinois advisors leverage the expertise of our research efforts and investment committee guidance to then create client-centered solutions.

OUR INVESTMENT COMMITTEE

The investment components and other investment considerations are governed by the TC Wealth Partners Investment Committee. This committee meets frequently and is chaired by our Chief Investment Officer, Mr. J. Reed Murphy. Mr. Murphy has over two decades of experience building and managing investment platforms at some of the nation’s largest investment firms. The Investment Committee includes several internal and external investment professionals. We believe this collection of professionals and our access to several research and investment partners provide us with a sophisticated and global investment capability.

BILL GIFFINChief Executive Officer

TOM MARGULISAdvisory Partner

REED MURPHYChief Investment Officer

DUNCAN ALEXANDERAdvisory Partner

GREG OSKOChairman

DOUG EYLESAdvisory Partner

TERRY KOTHEWealth Advisor

MIKE MCMORRISAdvisory Partner

KEVIN RICEInvestment Analyst

SHANNON STEVENSAdvisory Partner

A team of seasoned professionals, the committee meets frequently to review its investment policy, which includes economic, asset allocation, and portfolio construction strategies. The investment committee makes changes based upon what is happening in the world and the markets, balancing the opportunities for returns as well as focusing on risk management. These decisions are disciplined.

The committee also oversees due diligence. We vet ideas and make decisions as a group whose collective input and wisdom is greater than a single advisor. Because we don't promote a product for our benefit, we objectively look at the best investment options for our clients. This diligence is also ongoing as we actively monitor our approved strategies.

INVESTMENT OFFERINGS & DUE DILIGENCE

Performance is a symptom of a firm’s philosophy, process and people working together. Investing without understanding these dynamics can result in undisciplined speculation. As such, TC Wealth Partners and Trust Company of Illinois employ a team of dedicated investment professionals conducting quantitative and qualitative research to ensure that investment vehicles utilized are understood and can serve their purpose in an overall portfolio. We have alliances with research partners to increase the depth and breadth of our coverage of investment opportunities available to clients.

In a global economy, a broad universe of investment options that optimize opportunities within risk and return tolerances is critical for achieving your goals. TC Wealth Partners provides guidance and implementable solutions across a broad variety of asset classes, strategies and investment vehicles.